Credit card usage has increased in India in
the last few years. According to a survey conducted in October 2018, the Indian
financial market has more than 41 million credit cards in circulation today.
However, a majority of these cardholders are
unaware of how to use credit cards in the most beneficial manner. Credit card
dues are among the most common form of debts accumulated in the Indian lending
market. Card users require a certain level of in-depth knowledge on how to best
utilise them.
Here is a look at some
of the most effective ways to best use your credit card:
1.
Utilise reward points
One aspect that many credit card users tend to
forget is the reward points system for these cards. These redeemable points can
help make substantial savings on purchases. Do not forget to ask your card
issuer regarding how to use a credit card reward points. Some cards offer
points which you can redeem during travel, while others may lead to lucrative
discounts during shopping and so on.
2.
Use credit card according to billing date
Suppose the next billing date for your card is
August 10 and you decide to purchase a product using the card on August 9. Doing
so will cause the price of the product to be included in the bill you must pay
on September 10.
However, if you purchase the product after the
billing date, for instance on August 11, you will have to include the credit in
the statement for the next month. Therefore, the product’s expenses will be
included in the bill for October and not September. It is vital to know about
the important aspects of credit card bill payments.
3.
Credit cards to build a better credit rating
Your credit rating depends on how well you
handle credit. Effectively using a card will allow you to improve your credit
score if it is low. With better credit rating, you can avail several loans in
the future, as well as avail higher credit limit on your card.
The most important thing to keep in mind when
considering how to use credit cards to improve credit score is that you need to
pay your bills on time. Additionally, pay the full bill and not the minimum
amount. Ensure your credit utilisation is lower than 40% of your credit limit.
4.
Take advantage of cash back offers
Some of the best credit
cards in the Indian market, such as the Bajaj Finserv RBL Bank SuperCard, offer cash back on
every purchase made using the card. Therefore, the use of a credit card can
lead to thousands in savings every year. Some cards offer substantial cash back
on ticket bookings, while others offer the same on expenses incurred for dining
out. Pick the card according to your lifestyle and enjoy the maximum savings.
5.
Availing a loan against the credit limit
During an emergency, time is of the essence
and so is money. However, a quick source of funds may be difficult to find. At
such a time, you can opt for a loan against your credit card. The best credit
cards in the market allow you to repay these loans in 3 or 6 months, as
affordable EMIs.
